Food Group Gains Give Investors Something To Chew On

Friday's 15% gap-up gain by United Natural Foods (UNFI) left the Wholesale-Food industry group ahead 4.7% for the week. Safeway's (SWY) 7% surge and a 5% jump for the week by Whole Foods Market (WFM) secured a 2.9% advance for the Retail-Super/Mini Markets group.

United Natural Foods rocketed after reporting above-expectation fiscal fourth-quarter results late Thursday. The Rhode Island-based distributor has locked down an increasing share of the market to provide grocery chains with natural, organic and specialty foods, including ethnic and imported fare.

There are two ways to look at the stock's chart. From one view, it jumped into buying range Thursday on a rebound in strong trade from 10-week support.

The chart also shows a yearlong cup-with-handle base. The buy point, at 63.05, didn't put the stock in buying range until its gap-up spike Friday.

In either case, the stock was extended within the first 15 minutes of Friday's session. The stock's 50-day average volume is 228,000 shares, well below the preferred 400,000-share minimum. However, United has a high share price, and the average dollar volume is more than $15 million.

The leader in the supermarket group, Whole Foods, edged above a 56.93 buy point in a first-stage cup base Thursday. Shares topped the buy point in slightly above-average trade. Ideally, volume should be at least 40% to 50% higher than average at the breakout. But volume could kick in later.

Safeway's move also cleared a cup-with-handle base and a 26.99 buy point. But the grocery chain's outlook for this year calls for a 35% decline in earnings, starting with a 63% drop in Q3.

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07/29/2015 05:59 PM ET

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